Long Beach to spend $500K to implement study aimed at saving millions

LONG BEACH - A divided Long Beach City Council decided Tuesday to spend up to $500,000 to potentially save millions.

The operational savings, as much as $28.8 million annually, were suggested earlier this year in an efficiency study conducted by Cincinnati-based Management Partners.

Most of the report's reforms were tied to changing overtime compensation, lowering specialized premium skill pay and scaling back educational incentives. It also examined outsourcing certain municipal services.

To help implement the changes, council members voted 5-4 to contract with Management Partners for $500,000, if needed, with an option to renew for an additional year.

Some on the council objected to the amount because it exceeded the $200,000 in oil surplus funds previously authorized for the work in September. The additional $300,000 would come from self-supporting enterprise funds such as refuse and fleet services, which would be included in the consultant's work, according to officials.

"I find it somewhat ironic we are sitting here talking about efficiencies ... when we budgeted $200,000 to (implement reforms), and we're exceeding that," said Councilman Steven Neal.

Others were eager to approve the request by City Manager Pat West for the consultant work in the hope of gaining millions.

"That sounds like a heck of an investment to me," Councilman Gary DeLong said.

The move to institute the recommendations of Management Partners come as Long Beach continues to look for pension givebacks from its largest employee group, the about 3,600-member International Association of Machinists and Aerospace Workers. The city's police and fire unions have already agreed to pension reforms.

The IAM rejected a city proposal in August that would have increased employee retirement contributions and given reduced benefits to new workers to save $3.9 million in the general fund and $12.2 million in total in the fiscal year that began Oct. 1.

IAM negotiators responded last month with a counteroffer that assented to the changes, but requested that no more employees be laid off this year.

Councilman Al Austin called spending as much as $500,000 "ill-advised" considering many of the pay issues must be resolved through collective bargaining for the IAM.

The union's current contract expires on Sept. 30 next year.

An IAM official said last week that the union was committed to a solution that "fits both the city and our members," but rejected outsourcing services.

A substitute motion by Councilwoman Gerrie Schispke that sought to receive and file the proposal pending more details on potential savings failed.